Tuesday, September 20, 2005

The speed and the undaunted aggression shown by Oracle amazes me. I wrote months back that I see a good reasoning behind Sramana Mitra’s assesement that Oracle shall definitely begin to look at a major WMS player for acquisition – identified as Manhattan. I said that Oracle certainly needs a strong presence in this nearby space co-residing along with Oracle WMS . Now comes the news that the candidate is GLog(Though technically GLog is not a pureplay/full fledged WMS player by itself). I see that this acquisition has more value for Oracle in that it is acquiring an entity operating in a space where Oracle is at best seen to be having a light presence. Oracle’s horizontal acquisitions may be seen to be a ploy to eat competition – but this one like the acquisition of Retek can be seen as better fit .With this proposed acquisition of GLog, Oracle gets stronger on paper with a compelling, comprehensive offering for supply chain and logistics management. Oracle and GLog have complementary products with a shared focus that information and adaptive business processes are key to achieving corporate supply chain goals. The key challenges would be:- Support for existing customers- Integration is going to be painful – time consuming and therefore by extension it may take a long time before the actual synergies in processes begin to show up. - TCO calculations may remain only on paper for a long time to come.- Integrated information infrastructure that Oracle talks about may be several miles away but a useful direction pointer- Roadmap for both existing oracle customers using similar solutions from oracle stable- Roadmap for GLog customers using SAP , other ERP solutions, Custom solutions- Talent retention and optimal usage inside the oracle world- Oracle’s execution strategy/strength would come into sharper focus – several quarters down the line – people would begin to assess its ability for showing accretive revenue and quantified synergy benefits that these mergers have provided oracle and its stakeholders – customers and investors alike. Not to forget the thousand that would lose jobs during the painful merger process.Overall industry level challenges:- Competing/Related players in the WMS segment – a few are private players and in general small niche players – they may have to protect their turf more carefully – the going may be more tough for them.- There are some merits in the thought that WMS/Logistics solutions are a little more amenable to hosted models compared to other business applications – we can see some increased activity here.What next for Oracle ( assuming its appetite for acquisition is still burning) – Some bold guesses here – some in content/document/records management space & in appserver/integration space, one more in supply chain space(weak players abound)& a few are part of a same ecosystem that had GLog very much within it,PLM(small players abound) ( Forget logic of Oracle already having some presence in these spaces – these do not matter in Oracle world). As like every other post in this blogsite - these are my private views.